ITEX Corporation Announces Results for Fiscal Year 2004

Bellevue - WA - October 5, 2004 - ITEX Corporation, (OTCBB: ITEX) a technology company that provides a business-to-business payment system for non-cash transactions, today filed its Form 10-KSB with the SEC and announced its results for the fiscal year, ended July 31, 2004.

Fiscal 2004 Highlights

• Income from operations was $1,031,000 or 6 cents per share compared to a loss of $642,000 or a loss of 4 cents per share for the prior fiscal year.
• Total income, including one-time gains and gains from corporate-owned office sales, was $2,653,000 or 15 cents per share, compared to a loss of $627,000 or a loss of 3 cents per share for the prior fiscal year.
• Selling, General and Administrative (SG&A) costs decreased 42% to $2,044,000 from $3,539,000 for the prior fiscal year. This was in part a result of the divesture of corporate-owned offices.
• Current liabilities decreased 70% to $696,000 from $2,310,000 for the prior fiscal year.
• Revenues decreased 3% to $10,283,000 from $10,595,000 for the prior fiscal year.

Steven White, Chairman and CEO stated, "Results for fiscal 2004 reflect our successful efforts to create profitable operations and positive cash flow for each of the past four quarters. ITEX eliminated all outstanding stock options, expensed equity-based compensation, and paid off all long-term debt. We believe we have a solid, scalable business model in place and are now focusing our efforts on growing revenue while maintaining cash flow and profits."

"We continue to invest in upgrading the technology and infrastructure of our Broker Network and creating new programs to stimulate revenue growth. We intend to invest in new online tools for our Brokers and Members, in preparation for an expected launch early next year of our next-generation Internet application, Powered By ITEX. I encourage all shareholders to read our annual report on Form 10-KSB, which can be found at www.sec.gov."

About ITEX:

Founded in 1982, ITEX is a leading marketplace for cashless business transactions across North America. ITEX processes over $170 million a year in transactions across 13,000 member businesses and sixty regional licensees. Member businesses increase sales and open new markets by utilizing ITEX Dollars to exchange goods and services. ITEX is powered by ITEX Payment Systems, the leading payment technology platform for powering cashless business transactions headquartered in Bellevue, Washington.

Contact:
Alan Zimmelman
425.463.4017
alan@itex.com

This press release contains forward-looking statements that involve risks and uncertainties concerning our expected performance (as described without limitation in the quotations from current management in this release) and comments within the safe harbor provisions established under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of our future performance. We believe that these potential risks and uncertainties include, without limitation: the continuing development of successful marketing strategies for our concepts; our ability to sustain profitability; our ability to integrate newly acquired exchanges or product lines; the availability of adequate working capital; our dependence both on key personnel and our broker network; and the effect of changes in the overall economy and in technology. Statements in this release should be evaluated in light of these factors. These risk factors and other important factors that could affect our business and financial results are discussed in our periodic reports and filings with the Securities and Exchange Commission, including our Forms 10-KSB and Forms 10-QSB, including under the caption, "Management's Discussion and Analysis of Financial Condition and Results of Operations." All information set forth in this release is as of October 1, 2004, and ITEX undertakes no duty to update this information.